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Trusts

This category contains 142 posts

Trustees’ dilemma – how old is old enough to know?

The moral dimension of trusteeship arises in many contexts. The recent New Zealand court decisions concerning information obligations to beneficiaries, and the way this is dealt with in the new Trusts Bill, highlight the difficulty of judging what information is too much or too little to disclose. However, general principles on disclosure bypass the consideration … Continue reading

Family relationship minefield

In Sandman v Giboney, Mr Sandman claims that a law firm knowingly assisted a breach of trust by taking will instructions and assisting in the preparation and subsequent administration of a will when the will-maker did not have sufficient capacity to make a will. The matter came before the court in an application for strike … Continue reading

Resulting trust arises in contractual vacuum

The bare facts of Chang v Lee can be summarised as follows: Ms Lee purchases a property in Sunnynook Mr Chang (Ms Lee’s uncle) advances Ms Lee $275,000 of the $566,000 purchase price The advance was not a gift The terms of the loan advance were incomplete Mr Chang made the advance to Ms Lee on the … Continue reading

How afraid should we be of Clayton?

The Supreme Court decision in Clayton v Clayton changed the trust landscape.  But how afraid should we be?  Are all trusts vulnerable to Clayton-style challenge?  Or just the ones that push the envelope?  And, if the latter, how far can one push before there is a problem? A recent decision of Moore J has provided … Continue reading

Notional income knocked back

The High Court decision in Broadbent v Ministry of Social Development, which is essentially a test case, considers whether income derived from gifted assets (sometimes referred to as notional income) can be taken into consideration for income assessment purposes. The general purpose of the Social Security Act 1964, which includes provisions relating to a wide range … Continue reading

Two trustees go down to the woods … one is discharged, one is not

The use of corporate trustees is a common response to trustee liability.  However, where one of two natural person trustees retires and a corporate trustee is appointed, it is important to consider whether the retiring trustee has been discharged.  See ss 43, 45 and 46 of the Trustee Act 1956, which provide: Relevant Legislation 43 Power … Continue reading

Who pays the piper?

When a trustee retires, it is necessary to transfer the trust’s assets from the trustees (including the retiring trustee) to the continuing and any new trustee.    Where a trustee is removed in contentious circumstances the trustee may be unwilling to assist in the transfer of trust property.  Sometimes with good reason – for example where … Continue reading

Expectation denied

Expectations, great or otherwise are tricky to enforce.  When a person who had expectations in respect of an estate is disappointed there are various options for challenge open to the disappointed party.  However, each has thresholds that need to be satisfied. Consider the case of Blumenthal v Stewart.  Mr Blumenthal was the son of Mr … Continue reading

Undocumented loans 

The informality associated with loans between family members can lead to later disputes when different interpretations of the transaction emerge. Warin v Warin is a case in point. In that case $367,903.90 was advanced to the Warins’ daughter. The loan comprised: $100,000 that was initially secured by mortgage in 1997 $141,749.70 that was loaned to … Continue reading

Update on memorandum of wishes case

“The last of the Memoranda shows that Mr White Senior wished each of his three children to enjoy the benefit of his estate equally and that the property be sold to one of his three children. We will return to the words of the Memoranda in due course.” Thus starts the Court of Appeal decision … Continue reading